How to go abroad: The VOG case

Vog producers association is representative of single-product multivarietal companies, but it concentrates apple production in South Tyrol region only, and sales in Europe and in the Mediterranean. Due to the international political situation, it has to redesign its markets. This company prefers a direct relationship with its customer, mainly players in large-scale retail trade. Vog was confronted with the decline of traditional markets, first of all Germany, where since 1999 it lost 5% of share, reduced from 25% to 20%. However, since 2010 Vog has gradually entered the Eastern European markets with good performances, particularly in Russia, as well as in the emerging markets of North Africa and Arabia, which in 2014 equated the EU Centre as for sales volumes. Then, on the one hand the Russian embargo, on the other hand the political disorder in North Africa changed the situation. Gerhard Dichgans, Vog general director, says: ‘In addition, in Eastern Europe we were growing together with some large-scale retail trade chains (Lidl, Tesco, etc.) that expanded in those Countries, but now they are supplying from local producers, who in the meantime got ready for it. I think that we cannot even focus on the US market, to which the costs are too high to allow us to compete with their domestic production of apples, which is already strong. So, maybe our new markets are South East Asia, where we are not present and where the greatest barrier is the phytosanitary one’.